Published by: How to do it: Use GPOs to compete for better pricing – McKnight’s Long-Term Care News
As skilled nursing operators navigate a complex mix of inflation, workforce challenges and evolving resident expectations, group purchasing organizations are proving to be more than just purchasing vehicles. They are becoming strategic partners in operational and financial success.
By leveraging the collective purchasing power of multiple providers, GPOs enable facilities to secure lower prices on essential goods and services, ranging from medical supplies and pharmaceuticals to food, technology and facility maintenance products. Failing to take advantage of all the opportunities available via a GPO can be one of the biggest mistakes an operator can make.
Call your GPO
Managing supply chains becomes easier when a GPO is seamlessly integrated throughout a facility’s operations. In long-term care, the tendency is to focus a GPO on one department, but Incite Strategic Partners President and CEO Michael Dragone said everyone in the organization should know who the GPO partner is.
“The GPO should be the first phone call when looking for something that is purchase-related,” Dragone said.
For long-term care providers, that can mean everything from medical supplies and pharmaceuticals to dietary products, furniture, technology and facility services. By leveraging the purchasing volume of hundreds or thousands of member organizations, GPOs negotiate contracts that can provide lower prices, more favorable terms, and access to a broader network of suppliers.
The approach can help skilled nursing facilities control costs while maintaining reliable access to the products and services needed to support resident care.
Invest in GPO partnerships
These relationships depend on transparency, communication and active participation. Organizations that treat the GPO relationship as a collaborative process tend to see smoother implementations and stronger outcomes, said Jeff Easterling, CEO of AdvantageTrust.
“When organizations are willing to share data and engage in the process, it allows GPOs to deliver far greater value,” Easterling said. “When providers are open about purchasing patterns, utilization and operational needs, it enables more precise contract alignment and more effective execution. Ultimately, the more engaged a provider is, the more benefit their organization will realize.”
Dragone said that investing time in the relationship will yield dividends when the relationship is fully utilized. Monthly or quarterly business calls to ensure alignment and discuss upcoming purchases can make a huge difference.
“You get what you put into it,” Dragone said. “It takes a little bit of work and coordination.”
Expand your focus to unlock greater value
Too many facilities focus solely on price, but that is shortsighted, according to Dragone.
“There is so much more that goes into what determines the cost of an item,” he said, citing service, payment terms and delivery frequency as additional cost factors. “If I offer you a product with a certain price but the ability to pay in 60 days versus a week, there’s going to be a different economic situation there.”
Easterling said Advantage Trust has seen skilled nursing facility leaders prevent themselves from realizing their full savings potential by focusing on just a handful of contracts, such as food programs or medical supplies. His GPO has more than 2,000 contract categories available to its members, he said.
Additionally, aligning with a single GPO instead of contracting with multiple companies can create stronger purchasing power, Easterling said.
“We see many leaders trying to manage supply chain operations independently by verifying pricing, chasing variances or negotiating one-off deals,” Easterling said. “Those are functions a GPO is designed to handle. When providers fully engage with a GPO, they can shift that burden off their teams and refocus on what matters most, resident care.”
Negotiate for time
The deals and contracted savings provided through GPOs are already set so there’s no room for facilities to negotiate there. But, Dragone said, there is another way long-term care clients can demand more from the relationship.
“Where I really think you can negotiate is on the service side,” he said. “A member has the opportunity to monopolize their GPO partners’ time in the right way. Ensure that your GPO is as invested in you as the other way around.”
From the July/August 2026 Issue of McKnight’s Long-Term Care News
